How your Universal Credit and other benefit payments could change under Keir Starmer

Britain's Prime Minister Keir Starmer meets Scottish First Minister and SNP leader John Swinney during a visit to Edinburgh, Scotland on July 7, 2024 as part of a two-day tour of the four nations of the United Kingdom. (Scott Heppell, Pool Photo via AP)
Keir Starmer meets is on a two-day tour of the four nations of the UK following his election victory. (Scott Heppell, Pool Photo via AP)

As Keir Starmer begins to set out his vision for the UK under a new Labour government, plans as to what this will mean for millions of benefits claimants in the long-term remain uncertain.

Under Starmer’s predecessor Jeremy Corbyn, who was defeated in the 2019 polls by Boris Johnson, the benefits system was at the heart of the party’s electoral vision. The new regime has so far remained coy, however, about raising the prospect of changes in how payments are managed, but committing to few outright measures.

In some instances, such as personal independence payments (PIPs), Labour explicitly ruled out making any decision until after the ballots had been counted.

For now, no.

Payments managed by the Department for Work and Pensions (DWP) will remain on their usual schedules for the time being.

For example, Universal Credit payments will continue being paid monthly.

Any changes to payment dates or frequency would be agreed and signposted to recipients in advance.

Some people may see minor disruption over the summer if their usual payment falls on a bank holiday, in which case they should expect to see money appear in their account on the closest working day before.

The Labour manifesto promised to review the current Universal Credit regime - under Jeremy Corby the party promised to scrap it completely.
The Labour manifesto promised to review the current Universal Credit regime - under Jeremy Corby the party promised to scrap it completely.

Not much.

In 2019, the then relatively new Universal Credit regime was given almost a whole page in the manifesto compiled under Jeremy Corbyn.

Branded a “catastrophe” which had “pushed thousands of people into poverty”, the party promised to immediately scrap the system if elected and replace it with an unspecified alternative it planned to start work on “immediately” on entering government.

This time around, Starmer has simply promised to review Universal Credit “so that it makes work pay and tackles poverty”.

London, UK. 06th July, 2024. Liz Kendall, Work and Pensions Secretary. Ministers in the new Starmer Labour Party government in Downing Street for their first Cabinet Meeting since being appointed yesterday. Credit: Imageplotter/Alamy Live News
The new work and pensions secretary Liz Kendall. (Alamy)

At the moment, we don’t really know, but the Labour manifesto has offered some hints about a new carrot and stick approach.

Clearing the backlog of Access to Work claims - which provide cash to help disabled people start or stay in jobs - is one of the few concrete policies in the document, along with a new national jobs and careers service.

Labour has said it believes the Work Capability Assessment – used to decide how much universal credit someone can get and under what conditions – "is not working and needs to be reformed or replaced".

It says it wants to give disabled people the "confidence to start working without the fear of an immediate benefit reassessment if it does not work out".

But, the party has also pledged "consequences for those who do not fulfil their obligations".

Writing for the Telegraph in June, Starmer said serving the interests of working people is about "understanding they want success more than state support". He added: "Handouts from the state do not nurture the same sense of self-reliant dignity as a fair wage."

Labour's manifesto says "too many people are out of work or not earning enough", although it attributes long waits for the treatment of health conditions, including mental health issues as a reason for this "rise in economic inactivity".

The party adds: "Labour will reform employment support so it drives growth and opportunity. Our system will be underpinned by rights and responsibilities - people who can work, should work and there will be consequences for those who do not fulfil their obligations."

Since April 2017, families have only been able to claim Universal Credit or Child tax Credits on the two eldest children in a given household.

According to the Resolution Foundation, a think tank, this means low-income families could have missed out on more than £3,000 per year for children born after the cap was introduced which meant they exceeded the limit.

But despite boasting of an “ambitious strategy to reduce child poverty”, the manifesto makes no mention of the cap, instead offering free school breakfast clubs, increased rental protections and enhanced workers’ rights.

Asked directly, Starmer has previously said he is “not immune” to arguments in favour of scrapping the cap, but has so far refused “to put a date on these things”.

And Liz Kendall, the new work and pensions secretary, hinted last month the cap could be removed once Labour has completed the “first steps” set out in its manifesto.

People walk alongside a Job Centre Plus in London, Britain, October 25, 2023.  REUTERS/ Susannah Ireland
Labour had proposed an overhaul of job centres to provide more personalised support to people out of work. (Reuters)

Labour's manifesto makes no specific mention of Personal Independence Payment (PIP), which was introduced in 2013 to replace disability living allowance.

The party will be under pressure to provide some clarity on the benefit, however, as the previous Tory government had plans to overhaul the payment, including potentially replacing cash payments with vouchers that could be spent on specific equipment and treatment.

It is understood that Labour will review the public's response to a consultation on these changes which is due to conclude on July 22.

Before the election, Labour MP Alison McGovern told the i that "every aspect of the support for disabled people” must “help people get into work”. Speaking about the welfare system more generally, she said "big changes" were required, including replacing job centres with more personalised support for unemployed people.

In an interview with the Times, the now-work and pensions secretary Liz Kendall said: “What I don’t want is to have a situation where work coaches are spending all their time assessing and monitoring people, not giving them the opportunities they need,” she added. “Quite frankly sending off 50 CVs when you haven’t got what you need, rather than 10, isn’t going to make any difference.”

Labour has said it wants to devolve powers to local councils so they can decide how job centres operate, which it hopes will turn them into more of a hub where local employers will come to find workers directly.